Real-time authorization is the decision, made within a second or two, to approve or decline a card transaction while the cardholder waits. The merchant's acquirer sends the request through the card network to the issuer processor, which checks the card status, available balance, security data and fraud rules before replying. It is the first step of payment authorization and is followed later by clearing and settlement.
In card issuing programs the term has a narrower meaning. Modern processors forward each incoming request to the program owner's own system through a webhook, and the program replies with approve or decline inside a strict time limit. This lets a fintech company apply its own spend controls, check a ledger it maintains, or fund the card at that moment through just-in-time funding. If the program does not answer in time, the processor falls back to preset rules, similar to stand-in processing.